Here at Hurren Accountants, we work with professionals from all walks of life and at all stages. From national and multi-national organisations to regional businesses and sole traders, we cater to all requirements with our accounting services. Our work with sole traders is particularly important. As a sole trader you don’t want the headache of dealing with accounts and bookkeeping. We handle all this for you, leaving you to concentrate on your business. But there’s one decision that’s entirely up to you…
Registering your business as a limited company is one thing many sole traders look to avoid, especially during those early days. Whilst becoming a limited company means more paperwork, there are several advantages that are well worth noting. In this blog post, we share the benefits of going limited so you can take the right next step for your business.
Operating as a professional in any market sector is risky business. Whilst every challenge overcome can yield countless rewards for your career progression, calculating risk is an integral part of doing business.
As a sole trader you are responsible if a calculated risk you take goes horribly wrong. As a limited company however, it’s your business that takes the brunt, affording a high level of protection for its directors. Known as limited liability, this protection means debts, claims or other financial losses are made against the company, not the individual(s) in charge.
You pay less tax
Taxes are unavoidable whether you are running a limited company or operating as a sole trader. Unbeknown to most however, you could in fact be paying less tax if you operate as a business. As the director of your limited company you will be entitled to take dividends. Many limited company directors take a small salary, collecting most of their income as dividends.
With dividends you pay less tax and don’t have to pay National Insurance Contributions (NICs), meaning more profit goes into your pocket. You’ll still be entitled to State Benefits even if you don’t pay employee or employer NICs too, resulting in a win-win for now and the future. Do bear in mind that when taking dividends the correct paperwork must be issued. Our accountants can assist you in this area.
You look more professional
There’s no doubt that sole traders are excellent and hardworking business people, but many customers prefer to deal with limited companies. Limited companies tend to have a greater air of professionalism about them, instilling confidence into the consumers who are interested in their products or services. Those working with other businesses may also find that the limited label affords them access to more opportunities. Some large corporations only work with incorporated companies as a rule.
The improved reputation and credibility that going limited instates can also make raising capital simpler.
Registering as a limited company is easy. It takes less than 10 minutes to incorporate your company online leaving you to reap the rewards mentioned above. We can assist you at every stage, whether your business is going limited or you want to continue operating as a sole trader. Contact us today for further information.